This document provides guidelines and questions for Mini Case 4 on inventory for the course BKAR1013 Financial Accounting and Reporting I. It includes 5 questions related to inventory costing, entries, and calculations using FIFO and average costing assumptions. Students are instructed to show their work, include their name and page numbers, and submit their responses individually as a scanned PDF by the due date of November 20, 2021.
This document provides guidelines and questions for Mini Case 4 on inventory for the course BKAR1013 Financial Accounting and Reporting I. It includes 5 questions related to inventory costing, entries, and calculations using FIFO and average costing assumptions. Students are instructed to show their work, include their name and page numbers, and submit their responses individually as a scanned PDF by the due date of November 20, 2021.
This document provides guidelines and questions for Mini Case 4 on inventory for the course BKAR1013 Financial Accounting and Reporting I. It includes 5 questions related to inventory costing, entries, and calculations using FIFO and average costing assumptions. Students are instructed to show their work, include their name and page numbers, and submit their responses individually as a scanned PDF by the due date of November 20, 2021.
This document provides guidelines and questions for Mini Case 4 on inventory for the course BKAR1013 Financial Accounting and Reporting I. It includes 5 questions related to inventory costing, entries, and calculations using FIFO and average costing assumptions. Students are instructed to show their work, include their name and page numbers, and submit their responses individually as a scanned PDF by the due date of November 20, 2021.
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BKAR1013 FINANCIAL ACCOUNTING AND REPORTING I (A211)
MINI CASE 4: INVENTORY
DUE DATE: 20 November 2021
Guidelines for submission:
1) Please answer all questions.
2) Please write your name, matric number, and page number on the bottom of your answer document.
3) The mini case is an individual task; however, the discussion is allowed, but copying other student’s answers is forbidden.
4) Your answer should be handwritten and subsequently scanned with a scanner or
mobile scanner apps in a combined PDF file. The scanned document must be clear, easily readable, and complete. Photo is not allowed.
5) Submit your scanned answer via the Online Learning portal →
within the allotted time and period, before 12.00 midnight, 20 November 2021 (MYT). Only one submission will be accepted.
0 QUESTION 1 (Kieso, et al., 2018, Q.14)
Zonker NV purchases 500 units of an item at an invoice cost of €30,000. What is the cost per unit? If the goods are shipped f.o.b. shipping point and the freight bill was €1,500, what is the cost per unit if Zonker pays the freight charges? If these items were bought on 2/10, n/30 terms and the invoice and the freight bill were paid within the 10-day period, what would be the cost per unit?
QUESTION 2 (Kieso, et al., 2018, E8.2)
In your audit of Garza Company, you find that a physical inventory on December 31, 2019, showed merchandise with a cost of $441 ,000 was on hand at that date. You also discover the following items were all excluded from the $441,000. 1. Merchandise of $61 ,000 which is held by Garza on consignment. The consignor is the Bontemps Company. 2. Merchandise costing $33,000 which was shipped by Garza f.o.b. destination to a customer on December 31, 2019. The customer was expected to receive the merchandise on January 6, 2020. 3. Merchandise costing $46,000 which was shipped by Garza f.o.b. shipping point to a customer on December 29, 2019. The customer was scheduled to receive the merchandise on January 2, 2020. 4. Merchandise costing $73,000 shipped by a vendor f.o.b. destination on December 30, 2019, and received by Garza on January 4, 2020. 5. Merchandise costing $51,000 shipped by a vendor f.o.b. shipping point on December 31, 2019, and received by Garza on January 5, 2020.
Instructions: Based on the above information, calculate the amount that should appear on Garza's statement of financial position at December 31, 2019, for inventory.
QUESTION 3 (Kieso, et al., 2018, E8.8)
Chippewas Company sells one product. Presented below is information for January for Chippewas Company. Jan. 1 Inventory 100 units at $6 each 4 Sale 80 units at $8 each 11 Purchase 150 units at $6.50 each 13 Sale 120 units at $8.75 each 20 Purchase 160 units at $7 each 27 Sale 100 units at $9 each
Chippewas uses the FIFO cost flow assumption. All purchases and sales are on account.
Instructions: a. Assume Chippewas uses a periodic system. Prepare all necessary journal entries, including the end-of-month closing entry, to record cost of goods sold. A physical count indicates that the ending inventory for January is 110 units. b. Compute gross profit using the periodic system. c. Assume Chippewas uses a perpetual system, Prepare all necessary journal entries.
1 d. Compute gross profit using the perpetual system.
QUESTION 4 (Kieso, et al., 2018, E8.9)
LoBianco Company's record of transactions for the month of April was as follows.
Instructions: (Round unit price averages to four decimal places.) a. Assuming that periodic inventory records are kept, compute the inventory at April 30 using (1) FIFO and (2) average-cost. b. Assuming that perpetual inventory records are kept in both units and dollars, determine the inventory at April 30 using (1) FIFO and (2) average-cost. c. In an inflationary period, which inventory method - FIFO or average-cost - will show the highest net income?
QUESTION 5 (Final Assessment A202)
Palma Putih Bhd began operations in 2020 by selling a single product. Data on purchases for
the year are as follows:
Purchases Date Units Purchased Unit Cost (RM) Total Cost (RM) 18 April 2,300 13.00 29,900 9 May 2,500 14.00 35,000 13 June 2,600 14.20 36,920 10 July 2,300 15.00 34,500 16 August 1,700 15.25 25,925 14 October 800 15.50 12,400 12 November 500 15.75 7,875 9 December 500 17.00 8,500
On 5 January 2021, the president of the company, Mr. Haikal, reported 5,000 units physical inventory from stock count that was taken on 31 December 2020. Other financial information for Palma Putih Bhd for the year ended 31 December 2020 are as follows:
Detail Information RM Total sales 362,500 Sales discount and allowance 12,000 Salaries and wages expenses 48,000
2 Distribution costs 22,000 Administrative costs 39,000 Finance costs 3,000 Other expenses 3,500 Taxation 36,000
REQUIRED:
(a) Determine the cost of inventory under the periodic system using First-In, First- Out (FIFO) method as at 31 December 2020. (b) Determine the net profit for the year under ended 2020. (c) Palma Putih Bhd plans to expand its product line. Therefore, the president asked for your advice on the use of a perpetual inventory system in the future. Discuss TWO (2) advantages and TWO (2) disadvantages of using a perpetual inventory system.
